Faqs - Al Taasis

FAQs

Setting Up Business in Saudi Arabia:
All You Need to Know

The Ministry of Investment is a government entity that licenses foreign companies to operate in Saudi Arabia without a local partner. The MISA License allows having 100% foreign ownership.
MISA License enables foreign investors to serve the local market legally and independently without a Saudi sponsor.
Requirements start with but may not be limited to the following:
  • Commercial registration of the company, certified by a Saudi Embassy
  • Financial statements for the last year certified by a Saudi Embassy
Depending on the business activity and the required license type, additional documents may be required.
The Ministry of Investment Saudi Arabia (MISA) License allows foreign investors to get 100% ownership of their company in Saudi Arabia. The Ministry of Commerce and Industry (MCI) License is a business license specifically for Saudi and GCC nationals and special residency holders.
The MISA certificate can be issued within 24 hours of application. The process of getting your license in Saudi Arabia has three steps:
  • MISA Application: estimated time ranges from 5 – 10 days
  • Articles of Association: estimated time ranges from 1 – 5 days
  • Commercial Registration issuance: estimated time ranges from 5 – 10 days
Delivery is subjective to government timelines. We actively ensure to keep you abreast of the process.
We provide flexible options of packages that fit your needs and budget. Please get in touch with us for more details about our packages or how we can create a custom package for you.
The corporate tax in Saudi Arabia is 20% annually of the net profit.
The corporate tax (Zakat) is 2.5% of the net profit annually.
  • Trade license/Commercial Registration
  • Articles of Association (AoA) and/or Memorandum of Association (MoA)
  • Audited financial statement of the last year
Further documentation can be requested subject to the formation structure.
  • The Ministry of Commerce and Industry (MCI)
  • The Ministry of Investment Saudi Arabia (MISA)
According to the Ministry of Investment (MISA), the minimum capital required to practice wholesale and retail trade activity for foreign companies with 100% ownership is (30) million Saudi Riyals.
  • Trade License
  • Service License
  • Industrial License
  • Professional License
If they are from the same category and under the same license type, they can – you can’t combine two types of licenses in Saudi Arabia.
Setting up a foreign company or LLC branch typically takes three to six months.

Different types of business structures are available with their advantages, requirements, and differing scope of business activities and registration requirements:

  • Limited Liability Company (LLC)
  • Limited Liability One-person Company
  • Joint Stock Company
  • Foreign Company Branch
  • Solidarity professional company

Limited liability companies (LLC) require a minimum capital investment of around $133,100 (SAR 500,000)

Limited Liability Company (LLC) can have one shareholder and is limited to a cap of 50 shareholders.

No local sponsor is necessary to register a business with the MISA. As such, there are no legal disadvantages compared to other local companies.

Branch offices can engage in commercial activity within the scope of the license and require a minimum capital investment of $133,100 (500,000 Riyals).

Subsidiaries are a popular option for company setup in Saudi Arabia. Joint Stock Companies are rare outside of the banking and insurance sectors. LLCs are the most popular independent company type.

Representative offices offer the option of a temporary activity in Saudi Arabia. While STOs are primarily responsible for liaison activities and are not allowed to be commercially active, TCRs are temporary licenses to complete specific government tenders and cannot be active in the private sector. As opposed to branch offices, TCRs are also not required to invest a minimum capital.

A minimum of two shareholders are required for a Saudi Joint Stock company, and the minimum capital requirement is SR500,000 or SR5,000,000 (in the case of a single shareholder).

A foreign company appoints General Manager to represent local company affairs, such as opening or operating a bank account.

Saudi Arabia announced the Regional Headquarters Programme, which requires international companies looking to operate in the Kingdom to establish their regional headquarters in the Kingdom.

Depending on specific projects and activity sectors, there are financial incentives for tax and duty relief.

Saudisation is a national localisation program in Saudi Arabia called the Nitaqat program. Foreign companies in Saudi Arabia are required to hire around 30% of Saudi nationals, and the percentage can vary as per the type of business.

There are 4 Economic Cities, 1 Special Economic Zone and 36 Industrial Cities in Saudi Arabia. All these offer flexible regulations and incentives to foreign investors depending on the business license and type of activity.

Licensed entities are permitted to own property as per the entity’s need. Our team can guide you about relevant rules and restrictions regarding property ownership in Saudi Arabia.

  • Property ownership for private housing
  • Property ownership as headquarter of the industrial entity
  • Property as administrative headquarter or residence for the employees
  • Property ownership for warehouses

Foreign investment is prohibited in some areas mentioned on the Negative List. Our team can guide you about the restricted investment areas.

Sources:

  • Invest Saudi Guide
  • Deloitte- Doing Business in Saudi Arabia